(Bloomberg) -- Infosys Ltd. forecast sales that lagged estimates, underscoring how clients are tightening IT budgets to weather an economic slowdown.
India’s second-biggest software services firm expects to post revenue growth of between 4% and 7% this fiscal year ending March 2024. That compares with an average analyst estimate of 10.6%.
Demand for Indian software services boomed during Covid-19 as enterprises turned to technology to sustain their businesses. But a reopening of economies and consequent return of workers to offices have seen demand slide from its peak. Russia’s war on Ukraine and fears of a recession have also spurred caution among sectors from banking to retail.
What Bloomberg Intelligence Says
“Software companies have already seen a reduction in demand from enterprise clients and Infosys may also see a similar pullback. However, we do expect the company to grow faster than most of its peers given its large digital footprint.”
- Anurag Rana, senior analyst
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Infosys and bigger rival Tata Consultancy Services Ltd. lead India’s $245 billion software services industry. TCS’ quarterly profit Wednesday missed analysts’ estimates with the outsourcer saying some clients were deferring discretionary projects.
For the quarter ending March, Bengaluru-headquartered Infosys posted a net profit of 61.3 billion rupees ($749 million), a rise of 7.7% over the previous year, it said in a stock exchange filing Thursday. Analysts expected a profit of 66.13 billion rupees. Sales rose 16% to 374.4 billion rupees.
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